Morsi’s overthrow: second wind for Egyptian economy
Azerbaijan, Baku, July 9 / Trend /
Trend Arabic News Service commentator Aygul Taghiyeva
After Egyptian President Mohamed Morsi's overthrow and the consequent removal of members of the "Muslim Brotherhood" from power, Egypt's economy will benefit to a certain degree, although it is too early to talk about full stabilization.
Among the main reasons for Morsi's failure are a lack of political experience and the inability to restore the country's economy, which was in bad condition before his ascent and was one of the reasons for the overthrow of Hosni Mubarak.
Egypt's economy during Morsi's one year tenure, suffered greatly because of the Muslim Brotherhood's lack of political and diplomatic experience.
After the "Muslim Brotherhood" movement came to power, relations between Egypt and the Gulf states, particularly the United Arab Emirates and Saudi Arabia sharply deteriorated. The UAE and other Gulf countries fear the increasing influence of the "Muslim Brotherhood" in their own countries. They began to hedge budding relations with Egypt and even began to expel Egyptian citizens who emigrated to the Gulf for work.
The consequence of deteriorated relations with the Persian Gulf was a significant decline in investments from these countries, increased unemployment and the terminated delivery of the loans and financial aid from Arab petrodollar countries.
Immediately after Morsi was overthrown, Persian Gulf countries declared their readiness to provide financial assistance and loans to Egypt. Thus, only Saudi Arabia has allocated $8 billion to Egypt. Around $1 billion of this amount is in the form of a grant. All Persian Gulf countries and citizens of the country separately are willing to provide financial assistance to Egypt to the amount of $ 30 billion. According to the latest calculations, around $ 25 billion are required for Egypt to pay off an external debt and to start stabilizing the economy.
Moreover, during Morsi's power, Egypt has experienced a conflict with Ethiopia over the construction of the last dam on the Blue Nile, which will reduce the flow of water to Egypt by 20 percent. Ethiopia was not going to abandon this project worth $ 4.5 billion.
The Egyptians perceived the conflict between the two African countries as another indicator of inexperience of Hesham Qandil's government and a lack of Morsi's credibility as a political leader.
After Morsi left, the army voiced its intention to solve all problems with neighboring countries, including Ethiopia. Of course, the new Egyptian government will succeed in this issue. According to the analysts, it will consist of more experienced politicians.
The foreign investments in Egypt fell by 12 percent during Morsi's power. However, after the president was overthrown, big foreign investors have expressed their willingness to return to the Egyptian market.
Moreover, Morsi has failed to establish order in the Sinai Peninsula during his reign. A gas pipeline stretched from Egypt to Jordan and Israel via this peninsula. As a result, the militants regularly staged explosion on a gas pipeline. As a result, Egypt's loss of short gas supply amounted to $1 billion.
Of course, whoever comes to power in Egypt in the future will face economic problems, including inflation, the fuel crisis, external debt and unemployment. However, a politically skilled regime which is financially supported by the petrodollar countries will be more successful and make less political faults in the future, thereby insuring the economy from further decline.